Did a scratch-off game sold with a prepaid phone card violate South Carolina gambling law?

Plain-English summary

A legislator asked about two-minute prepaid phone cards carrying a “Lucky 7’s” scratch-off game and offering a way to request a free game piece. In September 2001, a senior assistant AG described the office’s existing position: cards never sold without the game piece looked like a scheme to avoid South Carolina gambling laws. The letter said sellers argued that the game was a permitted promotion, but the office viewed the game as the real reason buyers paid for the cards.

The letter stopped short of issuing an opinion on legality. It said disputes involving the card distributors, the AG’s office and SLED were already in litigation, and an AG opinion could not supersede a pending court case. Its comments therefore recorded the office’s position, not a court ruling or a final opinion deciding the legality of “Lucky 7’s.”

Currency note

This opinion was issued in 2001. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Retailers and distributors

The office characterized phone cards routinely paired with game pieces as suspected gambling-law evasion. It acknowledged the sellers’ competing argument that the free-entry option made the game a lawful promotion. It did not resolve the pending dispute by opinion.

Readers following the litigation

The letter expressly deferred the legal issue to the pending court case. It supplied no judgment on the ultimate outcome of that litigation.

Common questions

Did the AG declare the Lucky 7’s cards legal or illegal?
A: Neither. The office described its anti-gambling position but said pending litigation prevented it from issuing an opinion deciding the matter.

Did the free-game-piece option settle the issue?
A: No. Sellers relied on that promotional-game argument; the AG’s office questioned it because the cards were apparently not sold without game pieces.

Background and statutory framework

The letter identified three anti-gambling provisions, 16-19-40, 16-19-160 and 12-21-2710, as the basis of the office’s concern. It also discussed § 61-4-580, which sellers invoked for no-purchase promotional games. The stated obstacle to a formal opinion was pending litigation involving the same cards.

Citations and references

• 16-19-40, 16-19-160 and 12-21-2710: anti-gambling provisions identified by the office.
• § 61-4-580: promotional-game provision raised by sellers.

Official title

On the legality of a game called "Lucky 7s" attached to Great American Pre-Paid Phone Cards.

Requester

The Honorable Harry C. Stille, Member, South Carolina House of Representatives.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/september-7-2001/
• Original PDF: https://www.scag.gov/wp-content/uploads/2018/10/9-7-2001-Harry-C-Stille-01809600xD2C78.pdf

Original opinion text

The Honorable Harry C. Stille, 2001 WL 1215464 (2001)

2001 WL 1215464 (S.C.A.G.)
Office of the Attorney General
State of South Carolina
September 7, 2001
Re: Informal Opinion
*1 The Honorable Harry C. Stille
Member, House of Representatives
9 Dogwood Drive
Due West, SC 29639-0203
Dear Representative Stille:
You have forwarded to this office two “Great American Pre-Paid Phone Cards,” the use of which apparently provides the holder with two minutes of long distance telephone service. Attached to both of these cards is a game piece called “Lucky 7's” which states “Get three 7's in a horizontal, vertical or diagonal line (like tic-tac-toe) and win prize in prize box.” To determine if the card is a “winner”, the surface of the game piece is “scratched off” to reveal the alignment of the game numbers on the card, as well as the potential “prize” amount. On the back of each card are instructions for the use of the two minute phone card. Also on the back of the card opposite the game piece is the statement “No purchase required to play promotional game” with further instructions on how to obtain a free game piece, the “Official Rules”, and how to collect the possible cash “prizes” if the card happens to be a winner. You state in your attached note that these cards were purchased in Greenwood by one of your neighbors. Although you did not state the purchase price for these particular cards, my experience has been that the convenience stores charge
$1.00 for each card purchased. You state that the questions is “how are these legal?” Our Office has taken the position that these types of “phone cards,” which are never sold without an accompanying game piece, represent a scheme or contrivance designed to avoid prosecution under South Carolina's anti-gambling laws (including S.C. Code Ann. §§ 16-19-40 (West 2000) (unlawful games and betting), 16-19-160 (unlawful to use or offer for use any punchboards or other kinds of boards with numbers concealed thereon for the purpose of gaming or chance), and 12-21-2710 (unlawful possession and operation of gambling devices)). However, the distributors and store operators who sell these type of cards maintain that such games may be legally possessed and sold in this State. The argument often made by the purveyors of these cards is that these games are merely “promotional” in nature and are consistent with the promotional games authorized by the General Assembly under S.C. Code Ann. § 61-4-580 (West Supp. 2000) (holders of beer or wine permits may permit game promotions including contests, games of chance or sweepstakes where a) the game promotion is conducted or offered in connection with the sale, promotion, or advertisement of a consumer product or service; b) no purchase payment, entry fee, or proof of purchase is required as a condition of entering the game promotion or receiving a prize; and c) all materials advertising the game promotion clearly disclose that no purchase or payment is necessary to enter and provide details on the free method of participation). Our Office has asserted that the so-called game “promotions” connected with the sale of these two minute phone cards are mere ruses to avoid our anti-gambling laws, particularly since the phone cards are never sold without the attached game pieces. True promotional games, such as those offered by McDonald's and other legitimate business concerns, are always brief or temporary in duration, and the vast majority of the consumer product or service is always sold with no game of chance involved. It is highly unlikely that these two-minute phone cards which you reference are ever sold

© 2018 Thomson Reuters. No claim to original U.S. Government Works.

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The Honorable Harry C. Stille, 2001 WL 1215464 (2001)

without an attached game piece, since the purchaser is really buying the opportunity to win a prize, rather than a phone card costing fifty cents a minute.
*2 The legality of these types of “promotional” telephone or game cards is now the subject of litigation between the card distributors and our Office, as well as SLED. State law does not authorize this Office, by issuing an opinion, to attempt to supersede any pending litigation. Therefore, opinions cannot be issued on matters pending in court. However, I trust this information will be of some assistance. This letter has been written by a designated Senior Assistant Attorney General and represents the position of the undersigned attorney as to the specific questions asked. It has not, however, been personally scrutinized by the Attorney General nor officially published in the manner of a formal opinion. With kind regards, I remain Very truly yours, Nathan Kaminski, Jr. Senior Assistant Attorney General 2001 WL 1215464 (S.C.A.G.) End of Document

© 2018 Thomson Reuters. No claim to original U.S. Government Works.

© 2018 Thomson Reuters. No claim to original U.S. Government Works.

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